Penn State employees are not likely to receive pay raises "at typical levels" in the next fiscal year because of budget cuts stemming from the fiscal crisis, Penn State President Graham Spanier said in a speech to the Board of Trustees this morning.

However, tuition will not be affected during the current fiscal year, Spanier said, and added that the university will "endeavor to contribute to retirement plans and benefit packages" for employees.

In a struggling economic climate, the university was informed in September that the state would likely rescind 4.25 percent, or about $15 million, of state appropriations, Spanier said.

"There will be belt-tightening and some sacrifices, some positions will of necessity remain vacant for a time, certain initiatives will evolve at a slower pace, and we will all need to be sensitive to the needs of our students and their families," Spanier said.

However, he stressed that Penn State is "fundamentally strong" and "well positioned to weather the storm."

In a question-and-answer session after his address, Spanier said that the university would likely "be doing less hiring."

Gary Schultz, senior vice president for finance and business, said measures as drastic a university-wide mandated hiring freeze was unlikely but that some positions could go unfilled in certain departments.

"Hiring will not be business as usual," Schultz said.

Though Penn State's endowment payout will likely decrease, Spanier emphasized the university does not rely on its endowment to pay operating costs.

The Board also heard presentations on enrollment, admissions and student financial aid and the College of Arts and Architecture.

Spanier also mentioned that the organization he headed for the past year, the Association of American Universities, has been involved in recommending candidates for positions in President-Elect Barack Obama's administration.

Spanier said the organization has made some recommendations but could not say who they were. The positions in question are "a broad array," including science and education positions.

The board will also vote on changes in room and board rates for fall 2009 today.